Plop, Plop, Fizz, Fizz

The extremely disappointing outcome of Garuda Indonesia's Initial Public Offering (IPO) has degenerated to the post-disaster finger-pointing phase. With a closing price per share of only Rp. 590 (US$0.065) against an already downwardly revised projected price of Rp. 750 per share, reports in the Indonesian press now see the Indonesian Minister of Finance D.W. Martowardojo blaming Garuda for poor planning and preparation.

Martowardojo said Garuda failed to adequately prepare for their IPO debut and should have undertaken corporate consolidation or a reverse merger prior to going public.

In its IPO the national carrier offered 6.34 billion or 27.89% of its shares to the public comprised of 4.4 billion new Series B Shares and 1.94 shares owned by Bank Mandiri. The IPO was underwritten by three guarantors committed to purchasing 5.23 billion shares at a value of Rp. 3.92 trillion (US$435 million).

In the end, according to Bisnis Indonesia, 3.01 billion shares of Garuda were acquired by the underwriters, meaning only 2.22 billion shares at a cost of Rp. 1.66 trillion (US$184 million) were taken up by the public. 3.33 billion shares were taken up by some 11,069 parties from public sector via pooling and fixed allotments.